Higher Revenue And Losses In Q2/2022 For Array Technologies

• Array's Q2/2022 revenues of $424.9 million, included $72.7 million from STI Norland, representing 116% annual growth
• Its total executed contracts and awarded orders rose 110% annually to $1.9 billion
• In 2022, the management expects revenues to fall within the range of $1.30 billion to $1.50 billion
• It expects President Joe Biden's executive order as opening the way for approximately $240 million of projects to move forward

Solar tracker supplier to utility scale projects, Array technologies grew its consolidated revenue by 116% annually to $424.9 million, mainly due to $72.7 million coming in from STI Norland that it acquired, yet net loss widened to -$15 million, up from -$5.5 million in the previous year.

Adjusted EBITDA was $25.9 million, up from last year's $9.9 million, and adjusted net income $14.2 million, having gone up from $3.0 million during the same period. It was able to further improve its gross margin to 11.1%, the 3^rd consecutive quarter of improvement.

At the end of June 2022, Array's total executed contracts and awarded orders increased 110% annually to $1.9 billion, comprising $1.5 billion from legacy operations and $0.4 billion from STI Norland (see World's 'Largest' Solar Tracker Company).

Array has guided for its 2022 revenues to be in the range of $1.30 billion to $1.50 billion, and adjusted EBITDA as $120 million to $140 million.

"As we look at the current state of our industry in the US, we are encouraged by the recent executive order issued by President Biden in support of domestic clean energy. The executive order means that we believe the approximately $240 million of projects we previously identified as at risk are now expected to move forward," said Array CEO Kevin Hostetler. "While we don't expect the majority of these projects will get delivered in 2022 due to lead times, it is important that this demand is now solidified."

Hostetler said the Inflation Reduction Act when passed provides meaningful clarity on the long-term incentive structure for the solar industry, including investments that aim to tackle climate change.

Investment bank Cowen's research analyst Jeffrey Osborne opined, "The only negative from the call in our view was the balance sheet, given the slowdown in utility-scale solar over the past several months. Management noted that margin improvement will drive higher free cash flow in 3Q and 4Q, and they are prepared to pay down the $68mn outstanding balance on the revolver."